Moody Downgrades U.S. Credit Rating

Rates Spark: Treasuries out of favour
think.ing.com

... US Treasuries remain under pressure. It's not a "Sell America" thing, as no coincident dollar weakness. It's more based on the latest assessment of fundamentals. If this signals a broader trend of diversifying away from the US, even markets like Italy stand to benefit. The 10y Italy/Bund spread just marked its tightest levels since 2021.

US 10yr breaks above 4.5% again

Since the weekend agreement with China, we've turned bearish on Treasuries, as the recession risk has been downsized, and there's been a risk-on tone in the risk asset space. Also, we note that mutual funds had been setting short duration strategies over previous weeks, which had not shown up in prior yield movements. So an up-move in yields was overdue.

The fiscal story is something that continues to hang over the market, and the tax cutting ambitions are, if followed through on, seen as a Treasury market negative. That's been an ongoing thing churning in the background. Not new. But absolutely lined up as a negative. It's been quite a move. In the past five trading days the 10yr yield is up some 25bp.

No "Sell America" thing going on here. More a fair reflection of fundamentals. ...

Thanks, Trumpers!

You elected the bestest President ever!

And Moody's.... don't get caught by the ICE.

Where is SCOTTS to tell us all that this isn't a big deal, and that he is the only one knows what he is talking about?

Moody's was the last one of the major agencies to downgrade - so, this is kinda meaningless. Usually, contracts setting interest rates based on US government already referred to a majority of the agencies so this will have no impact on them as that condition was already met. As for the US debt itself, it does not trade based on Moody's rating so this is 100% symbolic only. I do find it funny that Moody's sat quite as a mouse when Biden was planning to add trillions in debt through loan forgiveness and was running spending at 50% higher than pre-covid levels despite him touting the economy is fully recovered. Also, I find it strange they time this now when Trump is the first president since Clinton to actually try to reduce government spending based on 'growing debt'.

Where is SCOTTS to tell us all that this isn't a big deal

You just had to, didn't you? :-)

Everyone seems to be crickets regarding the credit downgrade during the Obama AND Biden era ... who gives a ----? It's why I didn't say a word about it in 2023 when Fitch downgraded our credit from AAA to AA+.

"We're so much in trouble. It will take a generation to dig us out of the Trump era.
#5 | Posted by LauraMohr"

Clearly you are speaking on behalf of the Democrat party and not the US as a nation. Yes, it will take a generation or more for the Democrats to dig itself out of the hole it has dug. The problem for Democrats - YOU KEEP DIGGING. You have received flashing red lights from your voters that your policies are wrong and not wanted by even your own party and you keep doubling down. You are misinterpreting the voters shouting STOP THE WOKE, COMMUNIST NONSENSE as 'you are not going woke, communist fast enough!"

"#10 | Posted by REDIAL"

Given that 2 out of the 3 major credit rating agencies have downgraded our debt already - one for almost 15 years and one 2 years ago - you tell me what you think the fallout is going to be from this action? Is it going to be a like a corporation where their borrowing rates will increase by 100-200bps overnight? No - IT WILL HAVE NO IMPACT. If you are dumb enough to even believe that the Moody's rating has ANY impact on the interest rate paid by the Fed, you have not been paying attention.

Another view ...

US Completely Loses Perfect Credit Rating for First Time in Over a Century
www.newsweek.com

... Moody's Ratings downgraded the U.S. government's credit rating on Friday, citing repeated failures by successive administrations to control the country's growing debt.

The agency lowered the rating from its highest grade, Aaa, to Aa1, noting that while the U.S. still benefits from key strengths"such as a dynamic economy and the global dominance of the U.S. dollar"its fiscal outlook has significantly deteriorated.

Newsweek has reached out to the U.S. Treasury Department via email on Friday afternoon for comment.

Why It Matters

The shift means the United States no longer enjoys a fully stable top-tier rating from any major agency for the first time in more than 100 years. Moody's becomes the third and final major credit agency to reduce its assessment of the federal government's creditworthiness. Standard & Poor's made its first-ever downgrade in 2011, and Fitch Ratings followed in 2023. ...

"US Completely Loses Perfect Credit Rating for First Time in Over a Century"

Brought to you by the party that whines about interest payments on the debt.

Republicans have been trying to loot the Treasury since Reagan -- possibly longer but I'm too little to remember it. With Trump they finally figured out a way to do it. That's why they still support him and still think this is good for America. And it's happening just like David Frum said it would.

"Republicans have been trying to loot the Treasury since Reagan .... With Trump they finally figured out a way to do it.
#15 | Posted by snoofy"

What the fuck are you talking about dipshit? At most, GOP just wants the US government to take less of their money in taxes. Meanwhile - Democrats are stealing US government money through scams like USAID. The parties are not the same.

@#15 ... Republicans have been trying to loot the Treasury since Reagan ...

Well, yeah.

Maybe not directly loot the Treasury, but indirectly.

Tax benefits to billionaires, while cutting healthcare assistance to the poor.

The Country's richest people denying the healthcare coverage of the poorest people in the Country.

More about Moody ...

Moody's Ratings
en.wikipedia.org

... Role in capital markets

Together, Moody's, S&P and Fitch are sometimes referred to as the Big Three credit rating agencies. While credit rating agencies are sometimes viewed as interchangeable, Moody's, S&P and Fitch have different methodologies.[7]

All three operate worldwide, maintaining offices on six continents, and rating tens of trillions of dollars in securities. However, only Moody's Corporation is a free-standing company.[8] ...